Providence lays off 134 across Oregon health system, more cuts possible

Providence Health & Services said Thursday that it has laid off 134 employees across Oregon, part of an effort to cut costs amid growing financial pressures in the health care industry.

The broader Providence system, headquartered in Renton, Washington, is taking similar restructuring steps across its operations in seven Western states. The Catholic not-for-profit health system said it has eliminated 600 full-time jobs across its 125,000-person workforce. Most of those are administrative or non-clinical positions, though some medical providers were also laid off.

Providence said the cuts are essential to navigating the “new reality of reduced reimbursement and higher costs.” Hospital leaders in Oregon said they’re working to help affected staff move into other open jobs within the organization.

“This work is hard, and it reflects the fact that many health systems, like ours, are undergoing a fundamental restructuring due to widespread workforce and funding issues,” Jennifer Burrows, chief executive of Providence Oregon, said in a statement. “We are committed to being thoughtful in our approach and that will require us to continue this challenging work moving forward.”

In an interview, Burrows said the health system would likely cut more positions this year but hoped attrition and leaving positions vacant would prevent additional layoffs.

Earlier this year, Providence CEO Erik Wexler announced that the health system would

freeze hiring for dozens of open jobs and initiate immediate cost-cutting measures

, including cutting back on travel and pausing community sponsorships.

The health system said it expects financial headwinds to continue through the year.

The financial challenges Providence is facing aren’t unique, but leaders say they’re especially tough in Oregon because of state laws that dictate staffing levels, limit how fast costs can grow and restrict partnerships with large corporations and private-equity firms.

At the same time, Providence said the cost of labor and supplies are rising much faster than payments from insurance companies and Medicaid.

Other hospital systems in Oregon are also weighing cost-cutting measures. Oregon Health & Science University is also